Grant Shapps calls for £9bn boost to military spending in upcoming Budget 'to re-establish leadership in Europe'

2 March 2024, 14:40

Defence Secretary Grant Shapps has urged Chancellor Jeremy Hunt to boost military spending in next week's Budget in a bid "to re-establish leadership in Europe".

Mr Shapps sent a letter to Mr Hunt formally requesting that he increase defence spending to 2.5 per cent of GDP.

He warned that "bold action" needed to be taken to "re-establish" the UK's leadership in Europe.

The increase would amount to around £9 billion - a big step up from the current 2.2 per cent of GDP, according to a security think tank.

In an extract of the letter, Mr Shapps said: "I believe we must take bold action in your Budget in March to commit to defence spending increasing to 2.5% in 2024.

"This will resonate with our allies and adversaries. It would re-establish our leadership in Europe."

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The Ministry of Defence confirmed that the letter, sent on January 24, was accurate but refused to share the correspondence between the senior government ministers more widely.

Another extract, seen by the Telegraph, read: "I recognise this may mean hard choices elsewhere but we should seek to reap the benefits of your successful management of inflation and the economy.”

A third said: "The threats we are facing are growing and so defence spending is only going to go one way. We should seize the initiative for your Budget."

The Treasury refused to comment ahead of the Budget on Wednesday but pointed to last year's extra defence investment.

They said: "We have provided the Ministry of Defence the largest sustained spending increase since the end of the Cold War, with a £24 billion uplift in cash terms over the spending review 2020 period.

"At the spring Budget last year we also provided an extra £11 billion over the next five years.

"Our aspiration over the longer term is to invest 2.5% of GDP on defence as soon as the fiscal and economic circumstances allow."

As well as being lobbied by his colleagues for extra departmental spending, Mr Hunt is facing added pressure to deliver tax cuts in what could be the last fiscal statement from this Tory government before the next general election.

Official forecasts of the Chancellor's "head room" against his plans to get borrowing to fall in five years' time are understood to have moved against the government.

Treasury sources this week said Mr Hunt is considering a further squeeze on public spending as a way to deliver the tax cuts being demanded by some Tory MPs.